Tesco's chief executive Philip Clarke said that the giant supermarket chain would launch an Android smartphone at the same time as it releases an updated version of its budget tablet, the Hudl.

However, he said that the phone would not be a budget model and would "compete with Samsung's Galaxy S5".

Mr Clark said that the phone, which is most likely to be launched in the autumn, would come with Tesco apps.

Meanwhile, photos of a new smartphone from Amazon have been leaked in anticipation of a launch soon by the online retailer.

The 4.7-inch handset is set to run a modified version of Android, similar to the software used by the company's Kindle tablets. The phone is set to be unveiled next month, according to sources quoted by the online technology publisher, BGR.com.

Amazon has recently seen a sharp fall in its Kindle tablet sales.

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The sales decline has been repeated across several companies, with Apple reporting a 15pc annual fall in iPad sales in its most recent financial results.

Analysts say that tablets have become low-cost devices used primarily for accessing video streams and casual games, while large-screen phones have replaced the need for high-end tablets among wealthy consumers.